AOL Autos reports the study focused on each city’s median income in relation to the new-car price average as pegged by Kelley Blue Book. Said price was broken down to monthly payments of $633 per month for 48 months with 20 percent down while interest, insurance and principal exceeded no more than 10 percent of the household’s gross income.

The only city out of 25 to pull off the feat? Washington, D.C., whose residents can afford the average of $32,531 on a new car, broken down to 48 monthly payments of $641. San Francisco and Boston trailed the nation’s capital, while everyone else in the remaining cities were paying too much for their new car, according to Interest.com managing editor Mike Sante:

Too many families are spending way too much on new cars and trucks. Just because you can manage the monthly payment doesn’t mean you should let a $30,000 or $40,000 ride gobble up such a huge share of your paycheck.

Experts recommend spending up 20 percent of take-home pay on a vehicle purchase and subsequent payments.

I understand a vehicle being more expensive because of safety features, but to be honest, with the exception of navigation, I don’t really understand these in-car smart systems. Most of the population has an iPhone or Android phone which can have most of these apps (Pandora, iHeartRadio, Google, etc.), and there’s no need to use either of these devices while driving. If the technology was removed, vehicle prices would fall down. Just saying.

Edit: This was supposed to be a regular comment, not a response. Sorry.

A decent new car has never been more affordable than now. A $32,000 car is well above what most people actually *need* in order to get themselves and/or their family around. In North America we just have this sickness that we believe we deserve – nay, need! – more car than we can afford.

Have a big family? Dodge Caravan; under $25,000 brand new out the door.
Need to get to work? The cheapest cars have a full complement of airbags, ABS, A/C and enough power to get close to doubling any speed limit in the country. And that’s assuming you insist on a brand new car. There are other options if you go slightly used.

Want something fancier? Make sure you have the means to pay for it, and go nuts. Can’t afford it? Too bad; the world doesn’t owe you luxury and prestige while you whine about not being able to pay your bills.

I totally agree with you on the price of a decent new car. Personally, I have been trying to purchase used and simpler for a number of years now because I can’t even afford a “cheap” new car. I’ve tried to make those numbers work.
My main point was that the middle class’ buying power has decreased in most areas of the country. Wages have stagnated or decreased as costs have increased. As a result, even basic vehicles are no longer affordable.
I guess that I am an outlier since I choose to live debt-free.

It is wrong to imply that the average person can’t *afford* a car based on price. There are plenty of cars that satisfy their needs priced in a range they can afford. Rather, the average transaction amount for new cars is out of whack with the average income.

Phrasing it this way points to the real issue: Why is the average price so high? How are people buying cars they can’t afford? Are the assumptions of affordability correct (e.g., why use a 48 mo. loan)? Are they skewing the results by using mean transaction price instead of median?

The original article doesn’t answer these questions, and that raises the specter of manipulating data to push an agenda.

Exactly. Many people do 60, 72 or 78-month loans anyway, so they could probably “swing” the payments under those conditions. And if Insider.com’s status of “affordable” includes being able to make the 20% down-payment—which you almost always *should* do—most people don’t do that either. Insider.com’s “perfect financing scenario” doesn’t happen nearly as often as it should, which allows people to reach for nicer cars than they otherwise might. Many car buyers are of course payment-oriented, and will be happier with the lowered payments across a longer loan, without really considering the gravity of all those additional payments and the thousands of dollars’ worth of extra interest charges.

I’d be happy with a cheap base vehicle, unfortunately manufacturers won’t drop me an extended cab with a basic 5.5-8.5l V8 without fancy tech, rubber floors, vinyl bench, basic radio system without infotainment, and two solid axles.

You still want to say that removing this wouldn’t save money?
A basic V8 shouldn’t cost GM anymore than $3k if not less, high tech V6s are very expensive, ie 5k plus. V8s are starting to work up this expense ladder, its completely unnecessary.

There’s a simple solution for you and the few other people who don’t like modern reliability and safety: spend the money you would spend on a new truck on buying and substantially refurbishing one from the ’70s.

But through personal experience, car technology no longer goes for extravagant groundbreaking design/systems. Car technology today is about getting by on the bare minimum to get the car to 200k miles. It’s pull in someone and get them to leave several thousand lighter. They don’t care if the other companies have something superior.

Just like independent suspension, it can be amazing if done correctly, but seeing as how unusual it is to see a good IS system, I would rather fight for a solid axle than ask for an independent design and get a similar design as what’s in say the Cherokee.

Along those lines, if people stopped buying cars they couldn’t afford, the industry might actually see volume declines and price reductions. These vehicles are priced according to what the market will bear.

Unfortunately, I see a future where people will still buy cars that are out of their league, and when they can no longer do that, the people will opt for “renting” cars forever via terrible lease programs.

Personally, I buy car and drive it until the wheels fall off. Then I put the wheels back on and drive it some more. That’s the only way to reduce the cost of ownership.

One money guy, I forget which, said that there are two ways to maximize auto cost-of-ownership value – buy new and own for 10 years, or buy a 4 year old car and own for 4 years. The new and 10 was the slightly better model then, and has been better for the last 5 years or so since used car prices skyrocketed.

@zerofoo. Agree wholeheartedly. The problem is that there are so many people who live above their means (read, crazy loan/financing terms) that they distort the market and drive the prices up for those who are more responsible. A similar thing happens with houses (with the last housing price bubble being a result). If you want to play in either market (and most people do need a place to live and a vehicle to drive), you have to contend with a highly distorted (i.e., unnecessarily expensive) market. I make a very good living but find it hard to justify the absurd prices (plus sales tax and yearly personal property tax in my state) for the new cars that I’d actually be interested in driving. At least with cars, I find it is easier to “opt out” of the market to some degree by making smart (often used) purchases AND, most importantly, KEEPING/MAINTAINING the vehicle for much longer than most. There’s a special kind of enjoyment that I get from driving around older vehicles, which are worth around what sales tax would cost on new comparable vehicles, and do everything that I care about just about as well and in some cases (driving enjoyment) better than said new vehicles — with the admittedly not insignificant exception of lacking the most modern crash protection.

It’s my understanding the actual interest rate on leases, lately, has been super low. For somebody like myself, with a middle of the road 6.95% APR on a loan, a low interest lease followed by a lease buy-out, less any lease fees, may actually be the more favorable of the options, in the end.

Those infotainment systems come standard on a sub-$100 tablet, so I don’t think they contribute a lot to the price of a new car. If anything, manufacturers save money by replacing expensive buttons with a cheap touch screen.

It *does* seem like automakers don’t spend much money on their infotainment systems compared to what you get from a Samsung tablet or an iPad. And a tablet is a lot more replaceable than the rolling computers that modern cars are.

The mentality I’ve come across is “We need to choose a durable, tested infotainment system that has got to last for 15 years”.

Combining that mentality with the fact that you’re choosing equipment for the 2016 and beyond models right now means that the first car off the line has an outdated head unit (from a software and hardware point of view).

The programmers hate it because the infotainment system is supposed to play nice with every type of phone out there AND be vibration resistant AND work for 15 years AND be subject to the never ending cost-cutting forces that be.

Wellllllllllllllllllllll, it really depends on what the buyer is looking for.

I bought an iPad Air (16GB Wi-Fi only) for my wife when they first came out back in Nov 2013 and for $489 it is a pretty darn good little handheld computer, that can do everything she needs to do without having to resort to Apple’s iCloud functions.

The reason we chose an iPad Air is because my wife already had owned an earlier iPhone and had all her accounts established.

Other brands can cost less, some even have a higher pixel count for the screen, or better cameras, but most of them do not have all the apps that you can get from Apple.

I know plenty of people (real-estate agents, contractors and builders) who rely on their sub-$100 tablets to function as their personal assistants, and who love those cheapos.

There are still tons of issues with different phones, iOS revisions, Blackberry revisions, yadda yadda yadda. Infotainment systems often display the information on the screen with custom Lexus, or Toyota, or Ford graphics.

The infotainment system is rarely “only” a pass-thru. And as services like pandora or spotify or google maps change, hiccups can occur in the car’s system.

Equipment Junkie writes: “This geographic area of the country seems to be immune from the economic realities that many of us face.”

Hmmm, let’s think about what major employer is headquartered in Washington D.C., providing compensation and benefits far in excess of that found, on average, in the private sector? And how that major employer is served by other employers staffed by extremely highly compensated employees? And that the concentration of these well compensated folks is extremely high in the greater DC area?

Studies have shown that federal employees are more highly compensated than their private sector counterparts working the same occupations. As for the businesses working under federal contract, yes, let’s celebrate free enterprise and government spending.

The biggest federal employer are the armed forces. I don’t know how much private armies make, but I don’t want to go to Somalia to find out.

Other than that, those “studies” are wrong. You need to realize that the private sector employs the best and the worse. With few exceptions, federal employs solid B+/A- types and pays them adequately. You will definitely do much better in the private sector if you have a good head on your shoulders.

Of course, by specifying ‘same occupations’, the studies exclude sworn law enforcement officers and military personnel. And by compensation, the studies correctly look at total compensation, including benefits, vacation, and pension.

As I indicated in my first comment, the great federal mammary gland richly feeds both federal and private sector employees in the DC area. They have been relatively immune from the economic vicissitudes of recent years, compared to the private sector at large.

Wherever the average car price is set, or the time period term of the auto loan, Washington DC would remain at the top of the list of major US cities with the greatest proportion of residents who can afford the average new car. It’s the presence of the seat of the federal government that makes it possible.

Yes, pray tell what exactly is the “civilian counterpart” of a Combat Engineer performing route clearance operations. I will grant that even as an EOCA qualified (able to blow IEDs in place, but not render them safe) that I was below a police EOD tech qualification wise. On the other hand, they don’t encounter stuff daily either. And what about the Infantry cats that rolled with us? These studies always perplex me.

Now as a Signal chief I am pretty equal to my civilian friends with the same certifications and responsibility in the corporate world. Workload wise mine is just less stable. You deploy and work crazy long hours…you come home and not so much. It seems to average out.

> As I indicated in my first comment, the great federal mammary gland richly feeds both federal and private sector employees in the DC area. They have been relatively immune from the economic vicissitudes of recent years, compared to the private sector at large.

This is generally true, but consider why it is. It used to be that gubmint jobs paid pretty poorly in return for guarantee of stability. Loyalty for loyalty: slow but steady wage increases, decent pension, etc.

Then it happened to be a while back that private sector wages stopped increasing while the gub schmo’s kept getting their little cost of living adjustments, and suddenly it’s not too shabby to work for uncle sam anymore.

GDP growth certainly didn’t collapse, but most people are getting paid less. So your argument is curiously: “we should drag those guys down with us” rather than “why am *I* getting screwed?”.

angenthex: “GDP growth certainly didn’t collapse, but most people are getting paid less. So your argument is curiously: “we should drag those guys down with us” rather than “why am *I* getting screwed?”.”

Your argument is curiously, why should federal employees participate in the pain everyone else suffers in a recession?

You ought to recall there was a recession, and, unlike the private sector, federal government employees did not participate. If the so-called “Great Recession” shouldn’t be called a ‘collapse’, then whatever word you choose to describe it is fine with you.

If you think federal employees suffered as much as private sector employees did during the Great Recession, I can direct you to some federally subsidized green energy stocks you should have bought before they went bk.

> Your argument is curiously, why should federal employees participate in the pain everyone else suffers in a recession?

Can you rephrase your comment in a way that relates to mine or so it’s at least somewhat coherent?

I’m saying that if you’re getting screwed by someone (for a few decades at least), trying to make sure everyone else also gets screwed by the same people seems a dumb way to go about it. Now your turn.

You’re out of touch with the real world. I grasp that. You want all the upside, all the guarantees, and none of the downside. That’s greed, wrapped in an abiding self-pitying covetousness of anyone’s success. This economic vampirism is unsustainable. And you can’t gras p what I lead off and continued the thread with. But that’s OK: I don’t expect much from SEIU, “Forward!”, radical statist leftist fascist tyrants such as you. Hum the Internationale until an original thought arrives.

> You’re out of touch with the real world. I grasp that. And you can’t grasp what I lead off and continued the thread with. But that’s OK: I don’t expect much from SEIU, “Forward!”, radical statist leftist fascist tyrants such as you. Hum the Internationale until an original thought arrives.

Hey, just wonder since this has absolutely nothing to do with what I said: did you grasp what’s meant and choose to reply with something unrelated or is this some kind of standard response to anything confusing.

Just wanted to know for future reference if the argument was simple enough.

“Why do you think federal employees ought to be immune from the ups and downs of the overall economy?”

One doesn’t fix a recession by firing even more employees or cutting their wages. That doesn’t make any sense — the goal should be to increase employment, not to create more misery.

You may as well claim that you’d deal with a flat tire by punching holes in the others, just so that no tire enjoys an advantage over the other. That may seem “fair,” but it’s also obviously stupid, particularly if you’d like to move forward.

See, this guy gets it. Blue badges (federal employees have a blue stripe on their badges) don’t get paid squat, except for the political appointees that muck things up and slow down productivity. Green badges (contractors and consultants) make the real money.

Granted, green badges make the money because many federal employees are dead weight; unproductive, unresponsive, impossible to terminate. The reason they become dead weight are the uncompetitive salaries they garner, the lack of upward mobility (not till the boomers die… errr, retire), and low morale of being everyone’s favorite whipping boy.

You hire green badges to the work blue badges are unable or unwilling to do. You could pay blue badges more on the premise of getting more out of them,but there are no guarantees it would work. Plus you wouldn’t have enough money to pay green badges to get the job done.

Easiest solution is to wait for all the boomers to die (they seem to make up most of the federal workforce, IMO), and pay their replacements an actually competitive salary to get them to work. OR, don’t replace them and outsource pretty much the entire federal government save for the accountants, program managers, and political appointees (secretaries, undersecretaries, administrators, etc.).

Understand too that the hiring process is part of the problem. So many protected classes get bonus points on the various tests or special hiring categories that MUST be considered prior to selecting someone “off the street.”

I applied for a Civil Service position a couple of years ago and was told that, because I was not a veteran and because I had no other special classification, in order to be hired the hiring authority would have to prove that EVERY other person on the list was unqualified – Not simply that I was the best qualified, but that the other protected classes were totally unqualified. If someone was even partially able to do the job they would get the nod over me.

This is exactly the opposite of what the Civil Service exams were supposed to stop – political patronage. Today you become a protected class and then join the government. When you stop giving jobs to the people who are best able to do them you get the kind of results described above.

They are all keening and gung-ho at first but turn rogue when they learn the consequences of signing-on to an institution that does no real work and therefore considers ambition and enthusiasm to be fatal diseases.

Excellent people are the bane of my working day and I wish the economy would heat up enough to rid me of them.

Off to another employee morale conf. call now where my advocacy of corporal punishment will just be trashed yet again.

> Granted, green badges make the money because many federal employees are dead weight; unproductive, unresponsive, impossible to terminate. The reason they become dead weight are the uncompetitive salaries they garner, the lack of upward mobility (not till the boomers die… errr, retire), and low morale of being everyone’s favorite whipping boy.

Generally speaking these people are working in a large inefficient bureaucracy where standout performance is pretty pointless anyway. You want people who can push paper the same way every day, not Arthur Anderson types looking to make the government into the next Enron.

I think there’s a multiplier effect for highly competitive fields, too — the last time I looked at the federal pay grades for IT workers and the qualifications required for each level, I about died laughing.

The retirement benefits are good, but not enough to make up the pay difference, frankly.

I think some commenters are talking past each other. Nobody is implying the overpaid employees are those employed by the US military- most of them are OUTSIDE of the DC area (no need for route clearance combat engineers here in DC). I think what the commenters are referring to our bloated bureaucracy, such as an assistant secretary to a senior policy analyst at the EPA.

When you factor in benefits, federal employees make significantly MORE than their private counterparts except at the PhD/Professional degree level, which runs counter to the federal government’s efforts to retain the “best and brightest.”

Now don’t get me started on contracting, where preferential treatment runs amok. I once stumbled into a DC-based Ferrari owner’s forum and there was an entire thread where various members were discussing the various lucrative contracts they obtained.

To some extend a bloated bureaucracy is inevitable in any large org because it’s a social effect rather than government effect, though the lack of core competition (again rather inevitable) does exacerbate this.

> When you factor in benefits, federal employees make significantly MORE than their private counterparts

This didn’t use to be the case. It would be more accurate to say private employees now make significantly less than formerly shiitty jobs plus cost of living updates.

Are there going to be layoffs, specifically at DOD? I bet not in spite of the fact that with 70,000 or so fewer Soldiers alone one would think we’d require fewer civilians. I do know DODEA teachers are being let go at the post level as the population they serve shrink but I’d be willing to bet those at the Pentagon are more insulated.

Why don’t we just go ahead and say it: DC is some strange microcosm from another universe in which nothing at all has anything to do with life here on earth, and we’d all be better off if it sank back into the malarial swamp where it came from.

You aren’t the only one. A family friend of ours said that she would nevr let her monthly vehicular expenses (including insurance and fuel costs) be more than her tithe. And so far, she and her family have had a very financially-stable life. One of her cars is a 2006 Cadillac STS-V, too.

I’m inclined to agree. As it stands, my car is very cheap to own. It’s old enough to only need liability insurance—which costs $20 a month to add to our policy—doesn’t have a car payment and is small and fuel-efficient. (Of course, it is a Volkswagen, so if something breaks, it’s probably going to blow the budget.) But if—for example—my take-home pay is $4K a month and $800 of that is going toward the payment (not even including insurance and fuel), then I have a significant issue…probably to do with me trying to live above my means.

There have been many topics introduced in response to the headline article.

First, whatever happened to personal prudence & financial responsibility? I am fortunate and/or lucky enough to have done well very well financially, yet the most expensive new (or used) vehicle I’ve ever purchased cost $23,700 OTD (MSRP was $28,800). I still own this now 8 year old car as my daily driver, it looks nearly new, and I maintain it by the book (and it’s not required one dime of non-wear/tear repairs).

I could have afforded a car, in cash, that was 4x that (and this was 8 years ago) without sacrificing my lifestyle, but I didn’t and couldn’t see the point. 4x the money would have maybe netted me a 25% better 0-60 time, with worse ride quality and road noise, and less overall comfort, with a much higher insurance payment. I will most likely drive this vehicle for at least another 3 years, and maybe as many as 5 or even you hears, depending on further developments (I have no burning desire to replace it based on my recent litany of test drives of newer cars).

Second, the growth in government sector employment has absolutely exploded, but few people realize or acknowledge that the largest % of these government jobs, created since the 1960s, have occurred at the state & local levels of governmental units, and not nearly as much at the federal level (although the growth in federal “contractor” jobs has been extremely robust in the last 15 years). We can blame much of this, but not all of it, on urban sprawl.

Third, the figures cited as “responsible” percentages to expend on daily transportation are ridiculously high, IMO. As others have mentioned, a vehicle is the largest and fastest depreciating commodity that 98% of people will purchase in their lifetime; to dedicate as much as one -fifth of one’s income/savings to such a purchase seems grossly out of whack, IMHO, if a secure retirement is near or at the top of one’s priorities in life.

Finally, given their incomes, many people simply buy far more expensive cars than is logical given the points I raised prior.

Many midsized sedans, that are reliable and actually quite comfortable can be purchased new for approximately 20k in terms of actual transaction price if one is willing to skip the options that drive the base price up – and these are options that weren’t even available on most vehicles as recently as a decade ago. Hell, a “loaded” car back in 1998 had pw/pl, keyless entry, AC, a stereo with CD player, stability control, anti-lock brakes, illuminated gauges, cruise control, intermittent wipers, rear a d side defrost, alloy wheels – and many of these things are standard on BASE model trim cars now.

Lower trim line Accords, Camrys, Fusions, Malibus, Altimas, Chargers, Caravans – even V8 PICKUP Trucks can be had for less than 25k OTD (and around 21k OTD for the CamCordFusionBus).

The biggest problem with society and government in terms of finances today is that few people or entities realize the critical importance of or are pressured TO SAVE. This lack of discipline has created many societal and governmental systemic problems.

> The biggest problem with society and government in terms of finances today is that few people or entities realize the critical importance of or are pressured TO SAVE. This lack of discipline has created many societal and governmental systemic problems.

You only have to look towards Japan to see what kind of problems SAVING causes.

Most people (unfortunately incl academic economists) just don’t understand how economics works at the most fundamental level. The only thing that really matters is the aggregate productive output. Everything else like “money” is simply an artificial framework to motivate this. Sometimes even something as dumb as conspicuous consumption is necessary to drive output if the framework is dumb enough.

IOW, if someone is capable of X and gets stuck at some job (let’s say building fancy cars) producing less than X for whatever reason (because some dummy desires a fancy car more than X), that’s just lost opportunity and the only relevant question is how the system caused this.

While it can be argued that the Japanese save too much (though I disagree for some complex macroeconomic reasons I care not to debate right now), I doubt there are many reasonable people with a grasp of basic facts who’d dare argue against the premise that Americans DO NOT save enough.

> I doubt there are many reasonable people with a grasp of basic facts who’d dare argue against the premise that Americans DO NOT save enough.

Again, framing the discussion in terms of savings is largely irrelevant. In reality we trade IOU’s for cars, and somebody gets a job down at the car plant so they too have IOU’s to circulate instead of sitting on their ass; seems like a good deal to me.

Creating an artificial scarcity of IOUs to circumvent this increase in productive output is just willful obstinate.

“Many midsized sedans, that are reliable and actually quite comfortable can be purchased new for approximately 20k in terms of actual transaction price if one is willing to skip the options that drive the base price up”

The base Accord has alloy wheels (not wheel-covers), dual-zone climate controls, a large, color infotainment screen, a rearview camera, Bluetooth, SMS text-messaging function and Pandora compatibility. And yes, you can get it for around $20K new.

The point that seems to being missed here is that credit is based on projected future earnings. If you fail to realize those earnings, then ultimately, you leave a debt bubble that needs to be accounted for (at least until debt becomes generational, in which case, any indiscriminate consumption is just ensuring that your kids get to be peasants.)

We can continue to juggle IOUs with the expectation that if tallied, there’ll be no net loss or gain (for now at least). However, when the boomers start dropping like flies, each with hundreds of thousands of dollars in unpaid debt (and insufficient estate assets to cover the shortfall), there’s going to be a very very nasty day of reckoning for those of us still carrying a balance.

> The point that seems to being missed here is that credit is based on projected future earnings. If you fail to realize those earnings, then ultimately, you leave a debt bubble that needs to be accounted for (at least until debt becomes generational, in which case, any indiscriminate consumption is just ensuring that your kids get to be peasants.)

This is true within certain economic frameworks, or more specifically given certain arbitrary rules within those frameworks.

These rules (eg rent seeking, etc) necessarily create a system where the wealth/power is owned or at least controlled by a minority.

Blaming individual actors for the natural tendencies of their system is unfair, esp. if they’re largely ignorant to how the rules->framework->system work.

> very nasty day of reckoning for those of us still carrying a balance.

Sometimes there’s a very nasty day of reckoning for the system itself or its enablers.

I think using a blanket percentage is a bit silly. I’m spending about 20% of my take home pay on two car payments at the moment – on about $70K worth of cars. But those two payments combined are less than my (15yr) mortgage payment, and I have no kids to support. I could spend 1/2 my take home on a car payment and it really would make no difference to my lifestyle other than I would probably eat out less.

Also, as usual using averages distorts the picture. There are an awful lot of people who can afford a lot more than $32K for a car, but there are also an awful lot MORE people who spend less than $20-25K. Whats the average price of a Corolla, $17-18? A Camry is low $20s, That’s 750K cars a year right there. And what about all those $40K MSRP trucks that get sold at $10K+ off? How do you account for that in this picture?

>Each contributes his monthly legal obligation. Welfare pays the landlord directly for the rent and utilities. Via monthly “baby bonuses” and cash welfare payments intended for staples and other allowances, there’s always enough left at the end of the month for a regular supply of booze, smokes, weed and new tattoos.

All of these programs are generally designed to provide a standard of living for the kids. As the brother’s proxy you seem more concerned about somehow punishing her for managing to line up overlapping benefactors than the welfare of her children.

That’s conspicuously coincident with American trash esp those who managed to get some money, but then we are known for exporting culture.

My dipshit mostly unemployed 36yo well baked and well inked brother is on that welfare plan. It’s called “Mom”. There is no government equivalent. Then again, if I had to live with her I would probably toke up too, so it is a 2-way street to some extent.

She took $12K out of her 401K to buy him a car. I could have killed her. And not just because the car was a DODGE CALIBER!

Welfare pays the landlord directly for the rent and utilities. Via monthly “baby bonuses” and cash welfare payments intended for staples and other allowances, there’s always enough left at the end of the month for a regular supply of booze, smokes, weed and new tattoos. She’s quite liberal about it on social media, and my niece spares no details.

Well to be fair I doubt only the top 5% are buying all those cars, the auto industry has done a great job knowing their customers, leasing use to be for a small percent of rich folks now it is common place, at least on the coasts, 5,6,7 year loans once unthinkable now not so much. Most of the USA only leaves month to month and does not seem to care.

I believe that about half of BMW’s customer base leases its cars. And I’d be among that camp too, if I was in the market for a BMW. I would not want to deal with it after it was out of warranty. But really, I’m kind of the type of person that is happy under any reasonable budget as long as I can get a car that I like. If my budget is $17K and I end up in a used Cruze 2LT or LTZ, I’m good. I can’t imagine why someone would want to make a car payment that he/she can’t comfortably afford.

What about wage thiefs? I worked at GE on the east side of Houston starting in 1998. The day I hired in, I was told that work consisted of a 9 hour work day. 1 hour of “Casual OT”, and no pay for it. 13 1/2 months work for 12 months pay. Worked there 3 years. No BS, absolute truth.

Why 48 payments? That was the “standard” what, 30 years ago? Even the worst car produced today (with the exception, ironically, of trouble-prone “luxury” brands) can be expected, with reasonable certainty, to last 2-3x as long without any major repairs.

If the article is trying to talk about “averages” shouldn’t they also be using the average loan term, not just the average car price?

I was going to reply that no matter how you cut it, 32k is a lot of money, but you made a good point. Now that cars can realistically do 2-3x what they could do in the 80s-90s (and have a lot more safety gear), it is not accurate to compare prices vs. inflation. If you can amortize your 50k+ “Harley Davidson Edition” F150 over 10 years instead of 5, it starts to look like a decent proposition.

Of course, if you choose to keep your loan length the same, you can leverage those savings into other things, like paying off your mortgage or saving for retirement or a rainy day. The correct solution to, “I see my purchasing power and economic prospects diminishing over time, but at least my car is giving me more for my dollar,” isn’t to go out and buy a more expensive car.

In 2008 everyone was freaking out about how their economic world was crumbling and their future bleak, and now we’re back to going for the longest loan terms we can get, in order to be able to drive that Harley Davidson Edition truck. And then in two years, when we lose our job due to the lousy economy, we’re going to sit there looking at bills we can’t pay, and claim, “It’s not my fault! There’s no way I could’ve seen this coming!”

All the government-mandated fuel economy gimmicks (to benefit the EPA label only), and all the excessive safety innovations (to protect the careless/reckless idiots) aren’t cheap, you know. Welcome to the future.

Part of the issue here is that higher income folks buy expensive cars, thus driving up the average cost. It would probably be more realistic to look at a standard car, say a Fusion/Camry/Accord/etc. in a mid trim level, as the benchmark for affordability. You can get a decently equipped mid size car in the low to mid 20’s.

Haha, that’s a terrible excuse, expensive cars are few and far between, whereas cheap cars are a dime a dozen. Midsize cars simply aren’t practical for many people, and with the lack of truly fullsize cars, pickups are a main driver in price.

BS today’s mid size cars are yesterday’s full size cars , much like soda the medium is the old big, also if you need the space the best bang for your buck is a minivan , as mentioned above a caravan is about 25 OTD

Selecting the 1994-96 Impala (7th gen) as “yesterday’s full size car” is a bit of a stretch. A 90s shell riding on an ancient B-body platform, it was an anachronism even 20 years ago. But here’s the comparison:

So no, these new midsizers are no ’90s Impala – but they have approached interior dimensions of the 8th/9th gen (truly yesterday’s fullsizer). It appears the most appropriate place to look for those behemoth 7th-gen dimensions is likely an SUV.

Interestingly, the new Fusion has the longest wheelbase and greatest interior volume when compared to the Accord/Altima/Camry, with interior volume only 2.2 cu ft less than the 8th gen Impala.

Seth, yesterday’s full size cars were wider with room for 6 with bench seats front and back. It was also common to let children ride in the front seat. Today’s midsize cars are great for fuel efficiency and safety, but they’re not built for 3 across seating. Aerodynamics and styling changes have pulled the front of the windshield forward and the base of the back glass rearward over the trunk, but that dash and rear deck volume doesn’t translate into passenger space.

The other difference is yesterday’s body-on-frame cars were overbuilt enough to be useful for pulling trailers. Might get away with using a Camry with an auxiliary transmission cooler to pull a small trailer, but I wouldn’t try it using a CVT equipped Altima or Accord.

I’m not sure why someone who doesn’t need it for work would need a pickup truck. I have a friend who is 6’6″ and he’s very comfortable in my Fusion, to the point where he’s thinking of getting one for himself.

Because there is a popular theory that you need to buy a car that serves an absolute 100% of all your possible needs. Since you may want to tow a boat one weekend 3 yrs in the future, you NEED that truck because the Fusion clearly doesn’t satisfy your needs. It’s the same reason people NEED those 3-row SUVs, because they may want to take everyone in the extended family–and the dog–out for dinner (but can’t use two cars). The attitude is also the root of disparaging range comments on EVs. (Personally, I think the new Corvette isn’t ready for prime-time because I can’t fit a couple bikes under the hatch.)

I must admit that I was rather pleased with being able to sit higher in the Tucson loaner that I drove yesterday, compared to the Sonata and Jetta that I normally drive. But I could accomplish “sitting high” in a Kia Soul (or a Tucson), honestly. I don’t need to go out and get a pickup truck or a large crossover.

I get the sense from this comment that you live in a rural or exurban area. Go to a big city and have a look around. You will see three categories of cars: 1) rental cars; 2) new, expensive luxury cars; and 3) cheap, old, usually Japanese beaters that people buy to parallel park on the street.

Urban residents who buy new cars are almost all wealthy enough (or want to look that way) that they buy expensive cars.

Or is that the reason? Comparing a tech/feature/safety laden vehicle from the mid ninties, say a Mercedes S class to an S class today. Factoring inflation to correct for today’s buying power, the older S class in this example is more costly by far. You might say that today’s S class has cut out quality of design, materials, and assembly care compared to the older car and you would not be wrong. But that does not account for nearly enough of the delta, especially in light of all the content (regulated or otherwise) that is found in the new car. The real problem is wage stagnation. The vast majority of the economic growth for the last few decades has not benefited middle class workers. They are instead being told that they should be grateful for a job in these tough economic times. So, IMHO the price of cars is not the problem. You have never had such good cars per dollar than today. America just needs to wake up an realize that the American Dream is becoming just that, a dream, for far too many people. But considering where cars a being classified as affordable in the study, don’t count on that changing soon.

Truly and well-said. The world would be an immeasurably better place if we could only agree to make vehicles less-safe and less fuel efficient. And might this excellent line of reasoning find its utility in other realms, say in the airline industry or in hospitals, for instance? I’m presently working up a list.

Safety needs a common denominator. If vehicles would be regulated to a fixed mass, say three size categories, then there wouldn’t be a free-for-all escalation of heavy safety features to protect a Focus from a Ram Pickup. It would level the field.

As for fuel economy, we need a gas tax to fix that, dedicated to fixing current roads (and not current pensions).

And yes, certainly wage-stagnation is a factor, as is the increase of the weath of the 1%.

Good Lord, Detroit-X, I agree with everything you said here. It appears that I jumped to the wrong conclusion. I’ll be more careful in future. My only defense is that your second comment was much clearer than your first. BTW, I especially like your point about differences in mass, which seems to me to be rarely talked about.

That would solve nothing. People would still demand as many safety features as possible in each class of vehicle.

Buyers aren’t just demanding safety features in a Focus because they are worried about being broadsided by an F-350. They want maximum safety features to protect them in a collision with another Focus or even a tree. (At any rate, your regulatory scheme does not eliminate size and weight differentials among vehicles.)

Your scenario also does nothing to address tractor trailers or even large delivery trucks, which are quite common around here.

It’s pretty much impossible to find a truck without the LCD infotainment screens. Yea they may be getting harder for the average person to afford, but some people that are able to swing it, just skip to older stuff.
Who would want a new diesel? 6 years ago everyone on diesel forums would laugh at gassers and talk about how much cheaper their diesels were and how much better the resale value is. Last night I wish looking up 3/4 gasser engines an kept getting routed to diesel sites. The basic idea now is that buying a gasser will save you a large amount of money over diesel. So we went from 18+ mpg trucks being the norm to fast forward 6 years, 10-11 mpg trucks being the norm that are least expensive to run. You know it’s bad when diesel guys start pushing gassers. I saw a new 201(4)? Duramax a week ago…. Driven by an 18 year old, while that’s fine and all, is this truly where all diesel sales are headed?

Point is, way to much govt intrusion is present that is driving up costs for consumers. If I can’t buy it outright, paying back myself, its not happening.

No, the fuel economy tricks actually do work in “real life”, as you can see in Consumer Reports’ testing, and the safety innovations actually work as well, lowering injury and fatality rates, especially in smaller cars, and ESC does wonders for keeping those careless/reckless idiots (which, of course, all you elite drivers aren’t) from killing someone else.

But by all means, drive around in a ’57 Chevy getting 10mpg while giving off more pollution standing still than a modern car does at WOT.

The “1LUDYTE” license plate will probably be the only part of the car to survive a collision.

Last I checked, the sticker price of a perfectly DOT-legal Nissan Versa is about $12k.

If you think that we’re buying $32k worth of safety gear, then you just aren’t following the market. The dollars being spent are going toward horsepower, upgraded options, convenience features and nicer models. With bazillions of airbags, seat belts, etc. being produced, the added cost of those items are a pittance in comparison.

And without the safety gear, we would easily have another 100,000 deaths per year, as well as more injuries. Somebody has to pay for those, too.

It’s amazing how one can go from being very alive to being very dead in the bat of an eyelash.

It’s probably best not to dwell on it, but ignoring the risks altogether can lead to poor decision making. The human body was not meant to travel more than a few miles per hour; we were engineered accordingly, and traveling any speed much above that is a crapshoot.

I thought that was extremely excessive, too. In a world where banks suggest not paying much more than 30% of your take home pay on housing, how can it make sense to spend nearly that on a depreciating asset?

I’m a lot more old school than I like to admit. I make a decent living and receive a car allowance to boot.

But $32,000 is a lot of money, and in my mind, a ton to spend on a car. And a large portion of my time is actually spent in my car traveling to my customers. In other words, my car is a tool I rely on to make money. I don’t just use it to commute 20 miles and run errands on the weekend.

So I could argue that I NEED the “best” or at least something pretty darn good, which would at least imply the “average” new car. But spending that much, while I love cars and I love thinking-about-buying a new one, that average transaction price (financing $641/month for A CAR!) scares me off.

Again. That IS a lot of dough.

So I stick with couple year old cars that (usually – my last BMW excluded) are known to have low operating costs (Camry, 2 Prii, a Panther etc.). I keep them well maintained and surgically clean for appearances. I can’t have my customers riding in a hooptie. This is not as fun as a new car, but it helps me to sleep at night and keep contributing to retirement and our kids’ college funds.

Experts also say you’re supposed to save 10 percent of your income for retirement, spend 33 percent of your income on mortgage, and have six months cash available for the Rainy Day. And eat. And buy some life insurance. And all that takes precedence over the $32,000 car.

No doubt this study shows that there’s a concentration of wealth in and around Washington, DC. Frankly, this should a surprise to no one. What should worry people much more is that, according to this study, a large percentage of people can’t afford the cars they’ve chosen to buy. That’s not because of a lack of good, cheaper options, either – there are plenty of good cars for 20k or less – it’s because people ignore their economic reality and buy more car than they can afford.

Why is that? Most of the high-rolling, power broker people like in the MD and VA suburbs, like members of Congress, lobbyists, contractors. That’s not a good reason to deny the residents in the District voting representation in Congress. As it stands, Congress has a lot of say over the running of DC’s local affairs, and not always to the benefit of its residents.

I doubt many people are using 48-month financing. I’m guessing 60 month is far more common and is far from reckless given how long cars last now. That said, unless you need that third row or a full size work truck for your profession, there is no reason to spend $32K on a new car if you have a hard time affording it.

Why people are shelling out that kind of money I don’t know. I get real tired of car payments even when easily afforded.

$23k will buy a number of nice midsizers if you demand new. If you allow yourself to go used, well the world is your oyster really.

Mostly Boomers. Lot of them are sitting on very nice piles from years of steady employment, back when that was more common. My parents just bought a loaded 2014 Accord with a 48 month, 0.9% loan, but they can afford the $700 a month payment. So could I, but it would be quite a bit harder, and I get tired of making the payments. My current payment of $316 a month is getting old. I plan to pay that loan off early next year.

The premise here is bunk. So the average person can’t affort the average transaction price of the average car that’s routinely driven up by mass over-borrowing. People routinely borrow more than they should which drives up the average price, not the other way around.

Of course there are far better automotive decisions for the 50k household than buying a 32k car every 48 months. 10k used cars are pretty damn good. Or if one makes a decent better than average living like my old man did, but a new “average priced” vehicle once every 10 years.

Unfortunately $10k doesn’t get as much as it used to. I’m guessing that right now the used car market is inflated due to decreased sales numbers over the last recession. But we have a used car market specialist here, maybe if he sees this he can comment.

I only say this because I just went through this. I needed a decent, as lightly used as possible family vehicle for as cheap as possible. We focused on the Camry as a baseline. Most people, and dealerships, wanted nearly $12k to $13k for three and four year old base model 4cyl cars. At $10k you’re looking at a car with over 100k miles on it. Maybe that sounds decent until you realize that you don’t have to look too hard to find a brand new Camry, Altima, or Fusion for $18k.

There are certain brands/models that hold their resale value unjustifiably well, such as Civics and the Prius.

In many cases, if you look at the cost of maintenance, repairs, and depreciation for new vs. used, you’ll find that you’re not saving all that much by going used. If you have the money or good credit, and can make a long term commitment to a car, you might as well get a new car and keep it for 8 – 10 years.

I tend to agree with this if you’re looking at something basic. But in my mind, if you don’t have the cash to pay for the car you basically can’t afford it to begin with. Adding interest on top of the cost of the car over a couple of years skews the equation towards buying a used car that is known to be reliable, durable, and easy/inexpensive to repair as being the better value proposition.

In my case, we did want to go for that brand new base model Camry (or Fusion or Altima), but after fees, and taxes, that $18,000 discounted car still was going to cost us $21,000. We didn’t have $21,000. So we bought a used V-6 Camry with 93k miles for $12k instead, rolling the dice and hoping it treats us well.

Let’s suppose that you really did get a much better bang for your buck buying used. Why wouldn’t sellers recognize that and raise prices? Surely they would until the used cars aren’t a better deal and people go back to buying new.

The difference is of course the prestige and customization of buying new. That does raise the price a bit on new cars that is absent from used cars, but the actual value difference is much smaller than many believe.

Steven thinks the used car market is about to cool off a bit. But for right now, if you’re holding cars for the long term, the value is often in the new car market, especially when you consider how much of the time you can get staggeringly cheap long-term financing.

Used cars with low mileage and most of their usable life left are commanding prices only slightly below those of new cars. Used cars that are half the price of new cars or less often have half or less of their remaining usable life, and it’s the half where maintenance costs and the probability of early death both rise. (Not to mention the half where the car often looks like a hooptie.)

There are a few exceptions. For example, P71s from Police fleets get auctioned off for remarkably little money and have extremely durable components. No, you won’t be able to lie to prospective mates that you’re more affluent than you are, but it’ll serve every need you can possibly throw at it, and you’ll be able to pay off your mortgage that much faster.

The average person cannot afford payments on the average car if they decide that they MUST pay off the note as quickly as they would have paid it off 30 years ago.

In addition, the average person buying the average new car certainly keeps it longer than four years, so even if they do take out a four year note, then they’ll have some years with no payment at all.

Not to mention that the average person with an average car is driving a vehicle that’s 11.4 years old, so we can conclude that the average buyer is either buying used and/or holding onto their car for a very long time, and therefor the sky is not, in fact, falling.

I agree with your overall analysis but I often wonder on the long term reliability of most of today’s cars. Sure statistics show cars of the last five to ten years are much more reliable than their predecessors but I’m skeptical the current crop will best their more recent 00s contemporaries.

I think that the powertrains will go on for many years. As a gadget-fanatic, my concern is more about the computer interfaces. What’s going to happen in eight or nine years when you have this big screen in your dashboard that isn’t compatible with much of anything, isn’t upgradeable, and can’t be safely separated from the car? This is an even larger issue for infotainment systems that shift duties to smartphones. For example, Toyota’s baser Entune system and the MyLink system that is the Chevrolet Sonic and Spark both rely on a cellphone Internet connection via Bluetooth for navigation and other “apps”. What’s going to happen when the Bluetooth standard changes or when the technology is altogether jettisoned in favor of some other standard? Customers aren’t going to want to keep their old phones—which themselves will become incompatible with new software and network features—just because they’re compatible with their cars, and most people can’t afford to swap out their cars even half as often as they do their smartphones.

Maybe manufacturers will start offering some kind of modular infotainment that can be swapped every couple of years for not a whole lot of money. Of course that won’t help new-car sales, so maybe not.

“When will the consumer just quit buying these cars? I think if consumers just quit buying them prices would eventually drop.”

When we stop hollowing out the economy for the sake of the wealthy.

Median income has been stuck or reversing for decades, each recession results in an increasingly jobless recovery, and up-and-coming generations are problematically underemployed and facing start-up costs that are ruinous.

If you think car prices are bad: forty years ago my father bought a house for 1.5x his yearly salary. He didn’t make much ($21K) at the time. Currently, the same house would list for five to six times my yearly salary, and I make (comparatively) more adjusted for inflation. Plus, his generation could get a decent job out of high-school, whereas would require at least undergrad. Current 18-20-year olds are looking at undergrad, plus technical college, plus, more frequently, a few years of unpaid internships if they don’t want to work perpetually on six-month contracts or at a McJob, and even then they’re stuck behind early-Gen-X and Boomers who have staked out their space and aren’t moving.

Credit is about the only tool we have left because we (both government and industry) are thinking purely in terms of quarterly balance-sheets instead of sustainable growth.

Guessing you live in a high cost area, but that $21k 40 years ago is roughly the same as $105,000 today. In my neck of the woods, 1.5X that will get you a nice house. Take it up to 2X that, and you’ll get a VERY nice house here.

But the places with cheap houses typically (but not always) have lousy employment prospects. I could buy a VERY, VERY nice house in Northern Maine for 1/2 my current salary, but I wouldn’t be able to pay the mortgage with no job.

I was damned lucky to buy my little shack for only 3.5X what my salary was 13 years ago. And then there is that nice fact that salaries usually rise as the mortgage drops – I only owe .9X my current salary on the place.

And if folks think people buy more CAR than they need, don’t even look at how much more HOUSE they buy than they need. The average house size has what, TRIPLED since the 50’s? While the average family size is much smaller.

I agree, employment prospects definitely falls under local factors. Being gainfully employed in a higher than average unemployment area has tremendous benefits once you consider that salaries vary much less from one area to another than real estate prices do.

It’s been said a few times: car prices have never been cheaper indexed to inflation than they are now, and that’s with the unprecedented levels of safety, tech, and performance we’re enjoying. The problem isn’t that cheaper options aren’t available; you can get a decent car for less than half the $32,000 average price. People just aren’t choosing to buy them. They feel they deserve more. Mercedes et al have already reached far downmarket to get these buyers. The TV/consumer-whore-machine tells us that having a fancy car is important, so we do whatever we need to in order to get one.

I actually don’t know so many people who spend that kind of money on a car and can’t comfortably afford it. The families that I see financing a $40K Explorer Limited have yearly household incomes greater than $115K. Most average-earning families that I am acquainted with get cars that cost around $25K (new). My *good* friends that are my own age (early twenties) stay nearer to the teens for a new car, or buy lightly-used late-model compacts for around $13-$15K.

Ok got it , 20% for a new car, say 10% for running cost of car, 30% for house, 10 % for property taxes, 10 % for health care, 10% for heat , 15% for house bills ( food, light, …) some bucks set aside for old age say 10% oh and collage savings say 10% , if I listen to the expects I would be poor , and I need to talk to my boss, as I am well over 100 percent and I still have bills that need to be paid.

There will always be cars people can’t really afford and lenders willing to take the risk on folks buying those cars. But the avg transaction price of all sales should not be in unaffordable range. Industry needs to find ways to cut costs and gov’t needs to take a hike with its unreality.

On one hand, it would be nice to sock away a whole bunch of your money and save it for a nice retirement lifestyle, but on the other hand, you never do know if you’ll live quite that long. So it’s nice to kind of hit that middle ground where you’re driving something you like—which doesn’t necessarily have to have been purchased new—but that fits your lifestyle appropriately. My criteria for financing a car are that I need to have positive equity in it at all times, it needs to be something that I’m almost certain to like for the full loan duration, it needs to be something that I don’t mind the price and payment for (I *won’t* pay over $29,999 for a mainstream mid-sized sedan…not gonna happen), and it needs to be comfortably affordable.

Average family shouldn’t be buying a new car anyway. Cars are super robust, and depreciation is eye-watering…. so going used is fine. A 10 year old car these days is more reliable than a brand new car from 20 years ago.

I got new for far less than 32k. We are the average family and I buy new because I don’t want my wife having any problems while I am on one of those 9 month all expense paid vacations courtesy of those in DC. A 10 year old car is still a 10 year old car and the lack of worrying about it is worth it to me.

I guess I am lucky that I only have 2 kids and a normal (no third row) so I can get a lot of new car for WAY under 32 grand that fits us all quite well.

It has been mentioned on these forums that the monthly payment is really nothing more than paying for the service of reliable transportation. When hanging out in Kabul for the next several months I have enough to worry about without the stress added of wondering if her 90k Hyundai will finally have an issue leaving her to walk through some less than desirable areas of Louisville. As such she’ll drive the new Frontier.

Now were I here and able to respond quickly to any issue that might not be the case. Anyway, just pointing out that sometimes the peace of mind is worth the payment, especially if it is reasonably priced. There is no one size fits all solution here. I’m not talking an 84 month mortgage on some European iron either. A new car can be a reasonable buy especially when the inflated state of the used market and the cash on the hood for new cars is taken into account.

I remember a conversation I had with a first generation Chinese immigrant who had lived through the Cultural Revolution.

He told me how my Olds 88 was a typical American POS because I had to, when it reached about 8 years old, and I drove it across the country twice, replace the alternator, and the brake pads, and recharge the A/C because I moved to the desert. (I had never done maintenance on it, because it was my first car and I was stupid; the elderly couple who had it the first four years didn’t even rotate the tires…they expected to die before then, I guess).

He explained how he had a ten year old Toyota Corolla that had never once given him one bit of hassle. He first claimed he’d never once taken it to the shop, but, then, when I asked how some parts had survived, he did say – well, he was on his third alternator, and he’d had to change the brakes twice, and a new battery, and a couple new switches…but those are all wear items.

Funny how those weren’t wear items when originally comparing to my American “POS”.

This all says – unless you buy the real stand-out stinkers at the bottom of the quality lists every time, 5 year old anything is pretty reliable, but you’ll still have to replace plugs and plug wires and batteries and alternators and tires and brake pads and, above Mason-Dixon, brake rotors. The superiority of Japanese car quality is now just mythology.

My parents have been faithful GM owners for decades. They had a 1999 Buick Park Avenue that they traded at 130,000 miles, and 2004 Oldsmobile Bravada that they traded at 101,000 miles. Both were bought brand-new and driven carefully. Both required more unscheduled repairs that could not remotely be classified as “maintenance” than our Hondas have required.

2005 Pontiac, 43K miles: Brake rotors replaced due to warpage, and they’re warped again. ABS sensors in the wheels are throwing errors due to corrosion. Engine occasionally is hard to start due to a sticking solenoid. Checking the forums, all of these are common problems on this car.

The Pontiac is not a terrible car, and maybe the domestics have improved in 9 years, but I wouldn’t call Japanese quality a myth.

Naw…. show the the Japanese cars with problems like this huge GM ignition switch recall. Or the teething pains Ford had with MySync and the Fiesta DSG. Or the nightmare that was and still is CUE. Domestics are still not quite caught up yet, though I will give them points for being bolder. The gulf is nowhere near as huge as it used to be but it definitely still exists.

American cars were so horrid, for the most part, in terms of reliability, back in the 80s and 90s, that is was tragically comedic.

Sure, there were some people who had great fortune (i.e. Lucked out) with the occasional Ford Ranger, Park Avenue, Silverado or Taurus that was relatively reliable, but these were statistical outliers relative to the Japanese makes.

I’d venture a SWAG that it wasn’t until the early or even mid 2000s that the domestics truly began to close the MASSIVE reliability gap with the Japanese (and it’s my opinion that the gap is still not fully closed).

State codified lemon laws had probably did more than anything else to light a fire under the domestic manufacturers’ collective a$$es to improve the quality of their vehicles.

The problem with that line of thinking is that manufacturers can’t build five year-old cars. When buying used becomes the norm, what happens to the supply, and thus the price, of used cars? There will always have to be some equilibrium of new-to-used cars, and as the recession hit, we already saw the price of used cars rise to the point that it sometimes makes more financial sense to buy a brand new one. Having the “average person” buying used cars won’t work unless you have some kind of elite that go through new ones at a high rate.

That thinking is only a problem if everyone adopts it. There are a lot of folks who are well above average and can continue to buy new cars.

But again, used cars today are the best they have ever been. Let me put it like this. I bought a 93 Accord EX in 2003 for $2200. It was in pristine shape and only had 93,000 miles. That car was about $18-20K in 1993, equivalent to $31K today. A 2004 Accord EX cost that $22K new, or $26K today and goes for ~$8K now. Why? The 04 is that much better of a car, from safety, to fuel economy, to performance, to build quality, and should have no problem going another 10 years. Couldn’t say the same about the 93 Accord when I got it, and it was absolutely pristine.

Some folks can afford to pay for that peace of mind. Those folks just don’t represent the average American household. Buying a car that costs more than half your annual household income just seems like a terrible idea, when you can get a used car that’s not much less reliable for a significantly lower cost per mile/time of ownership.

Well, no. It depends upon how long you keep the car. If you buy a car new and keep it 10 years, your cost per year is likely to be less than buying two 5-year old used cars in the same period.

What is expensive is buying a new car and then trading it 3 years, or even 5 years later.

The only way to possibly “beat the system” is if you’re a low mileage driver (say less than 10K miles/year. Then, you can probably buy a 2-year old car and keep it ten years without getting in repair hell, and you’ll save the initial depreciation hit. The supply of luxury cars coming off lease after 2 or 3 years is a pretty good source, if you buy something that is reliable.

My father-in-law told me a story about a (successful) retired friend of his who was being teased at their weekly breakfast.
Q: “Why do your cars keep getting smaller and smaller?”
A: “I refuse to pay more for a car than I paid for my first house.”

I live in the DC area (western NoVA). Mrs. Ark works for the Federal Government and I work for a “private monopoly.” Combined we exceed the median household income for our area, not by much mind you. With that said, the thought of spending $30k on a new car scares the crap out of me. Or rather, it’s not something I would even consider. The most I’ve ever spent was $23k on my used Subaru which I intend to drive until it is nothing but individual parts in the driveway. I’m not sure how people can justify paying that much for something that depreciates so rapidly.

Having driven around DC at various times, I will say there is no way I would drive a new car every day up there. I can’t imagine new would stay new for long in those type of conditions. Beter I have something that al the scrapes and dings blend into.

It’s super easy to the car of someone who lives in DC – no not, DC plates, in VA,DC,MD no one seems to actually have plates representing where they live… mostly Marylanders – just look at the rear bumper cover. If it is clean, the don’t. If it is completely pock marked and trashed, you have a street parking DC resident.

Or in my case, a DC street parker. I knew where every free parking spot was within a half mile of the Navy Yard – and took advantage daily, with my cars showing the ravages. FWIW, I stayed in NoVa during the week, but I live in Tidewater (now Hampton roads), so my car was VA registered.

That *is* a good question. My primary reason for leasing would be wanting, for example, a new X5, but not wanting to hold on to it once the warranty expires…sort of a “hot-potato” thing, if you will. It’s not a straight comparison, but even with a sizable “due-at-signing” amount you’d have to get a pretty expensive car to get over $32K worth of accumulated lease outlay in the first place. Of course that’s offset by never having any actual equity in a leased car, but still…

And the only way I’d lease a car is if I had an inexpensive, paid-for ride as secondary transportation.

I never understand this rational. If you can afford to buy an X5, you can EASILY afford to fix it. Depreciation is FAR more expensive than repairs, even on a BMW. The trick is to have it paid off before the warranty runs out. I plan to keep my 328i wagon until my advancing dementia causes me to forget how much the thing cost way back when.

Leasing certainly CAN make sense. You have to run the numbers both ways. I nearly leased my Abarth, but then they came back with the free money interest rate that made the lease more expensive.

Capitalized cost. Essentially the negotiated sales price on which the lease terms are based.

Typical lease outlay over three years is around 60% of that number, including both the payments and other charges. In theory, if your lease is neither a steal nor a ripoff, you would pay about the same total amount to lease the car and then buy it at lease end as you would to finance it over a similar term. Sometimes luxury manufacturers, particularly BMW, will offer extremely aggressive lease deals where leasing is unequivocally a better option than buying.

Of course the thing that’s obvious to all of us here is that hardly anyone *needs* to pay $32K for a car. A loaded compact car might cost $22-$23K, with lesser models being in the teens. $25K will get you a mid-spec mid-sized car, and $26-27K can even you a loaded mid-sizer. Minivans are rather cheap. You can often get a loaded compact crossover for somewhere near $27.5K, and even if you’ve convinced yourself that you need one of those 7-passenger crossovers, those start around $27-$28K, too. All of this doesn’t even mention the fact that plenty of cars come in well under sticker-price, too. A car company might have $2K worth of incentives on X model for Y month. Of course if you don’t ask for the incentives, the dealer may not give them to you, but most people know enough to ask what kinds of discounts a car is eligible for.

Does this story tell us anything meaningful? A $32k average could be the mathematical product of an Elantra and a 3-series. We have no idea from that number what is actually being bought. All it tells us is that many households can’t afford a $32k car. So what? When there are comfortable family sedans for under $25k, it hardly constitutes a hardship.

Actually, come to think of it, the “mode” price (most frequent) would be the most interesting and telling. Round all the vehicle new car sales to the nearest $1000 dollars and let’s see what the most frequent price is. I’d bet it is closer to $18,000 than $32,000.

I don’t see it as being a hardship issue, I see it more as pointing out that the average consumer can’t afford the average priced car.
Though it doesn’t say if this has changed recently and if so, has it changed for the better of for the worse? Maybe 10 years ago no one could afford the average priced car and things are getting better. Or what if it’s been like this for the last 30 years? It doesn’t provide the proper perspective – which is how these kinds of articles get so much attention.

It breaks down that the garage of the DC-area government building where I work is full of Mercs, BMWs, Escalades, Tahoes etc, few of them more than 3-4 years old, while 50 miles away people are buying new Hyundais, Chevys and so on, and keeping them for ten years.

And yes, the word “average” is a dead giveaway that the Caddies and Bimmers are being averaged with the Accents and Darts to come up with a price that nobody in Middle America is paying for their family car. Even here in the Capitol City, my loaded Chrysler T&C was around 26k out the door. If anything, 32k is the opening bid for a 20-something’s status symbol. And yes there are a lot more of those around here than you’d think possible…

Let’s put it this way, “Average” does not equal “Median”. I’d bet you’ll find that far more people are buying lower-priced cars than buying higher-priced to make that “Average.” The Median is probably closer to that $25K range.

Transaction prices are up thanks to longer loan terms and increased leasing. It’s really as simple as that.

When people are given the opportunity to spend more, they do. The fact that the average full-size domestic pickup truck is selling for about $40K, well above their base prices, is illustrative of how buyers want toys that they don’t need.

The numbers also illustrate that many households don’t participate in the new car market. In a given year, the average household buys used or doesn’t buy at all. Auto journalists focus on shiny new cars, but much of the real-world sales activity is taking place on Craigslist, Auto Trader, etc. and on used car lots.

And people wonder why I keep saying today’s cars are simply too expensive. Why are older people driving Nissan Cubes, Scion Xcs and other tiny SUVs rather than their once-beloved Buicks, Cadillacs and Lincolns? Because they can’t afford them on their ‘fixed’ income. Even middle-class families can’t really afford a $600/month car payment on top of their rent/mortgage, utilities, food, etc…; not when they’re only taking home $1200/month if they’re lucky. (I said “taking home”, not ‘earning’.) They’re not buying what they can afford, they’re buying what they want in the hopes they can eke out the payments through low interest, long-term loans now extending up to 8 years! Either that, or they’re leasing–essentially renting their new vehicle for 2-4 years at a much lower monthly cost in the hopes that they don’t get hit by a high closing cost if the residual value falls below the original estimated value.

Some very interesting comments here. Our situation in Canada is somewhat similar. We do however have a social safety net, that comes with a wicked price tag. Our consumer goods, including, cars are 10 to 30 percent higher.

With every passing day, good paying private sector jobs, are vanishing. To be replaced by Mc’job. Those lucky enough to work for the governments, at all levels have indexed pensions, and job security.

I believe that our much touted social safety net,is nothing more than a giant Ponzi scheme. Sooner, or later there won’t be enough funding at the bottom of the pyramid, to support the top.

That Honda coupe that was featured here at TTAC yesterday just under 24K will run you 26,245 MSRP here in Canada. Now, by the time you have taken it home, you won’t get much change from 32K. That’s about the average, to low, take home price, of a Canadian vehicle.

Aston, Ferrari, Lamborghini, Rolls account for roughly 5,000 cars out of 15 million. That’s one three-thousandth of the market. If they sell for half a million each and every other car sells for $0, they still only contribute $166 to the average selling price.

That would be swell if those were all $35k F150 XLTs, but those numbers are lumped together with the other F-Series trucks F150-F750 or close to it. The bigger the truck, the more expensive. A loaded F450 is easily $70k.

You are completely, 100% wrong. There’s no way pickups are $20k vehicles. They are $15k at best, and that’s with the 4 piece leather living room set and complimentary tablet.

That being said, US manufacturers are really good at building those 4 piece leather living room sets, with complimentary tablet. Toyota and Nissan tried their best and achieved essentially nothing (low single digit market share).

Americans may not know how to design cars anymore, but they do know pickups. They are overpriced because people are willing to pay; same as Porsche.

@Heavy Handle:
“There’s no way pickups are $20k vehicles. They are $15k at best, and that’s with the 4 piece leather living room set and complimentary tablet.” Regretfully, you are grossly underestimating the price of the modern pickup truck on cost of materials alone, not even considering forming and assembly. That said, I fully agree that full-sized pickup trucks are as grossly overpriced–perhaps by as much as 100% over cost across the board and maybe even more for the high-end models.

I can see 20k for a stripper work truck; WT or XL. My truck used to be my office. I got the bigger V-8, four wheel drive, leather heated seats, a sunroof, tow package and the auxiliary equipment that goes with it. FWD was used to drive onto the jobsite; it’s good be to king and not have to walk through the mud. Especially when the jobsite was nothing more than some bulldozer scrapings. The tow package and all the auxiliaries? Yep, I had to tow equipment from time to me. Other things hauled in the truck on daily basis: spare work boots, a pair of jeans, a change of clothes(have changed and went from jobiste to dinner) and occasionally a suit and all the accoutrements. For those who live out of their trucks, the extra money is considered well spent.

As my moniker indicates, I live and work in The Capital of the Free World (as it used to be known). I grew up in the DC metro area and, with a few breaks for higher ed and working the police beat in Houston, have lived here for 55 years. Unlike practically everywhere, metro DC is a white collar town and always has been. While the federal government pays people well, you’re not going to get rich working Civil Service. In the last 20-25 years, a significant private sector has developed, not just the usual collection of lobbyists, lawyers and “Beltway bandits” aka “consultants.” The explosion of Internet-based communication originated in the Northern Virginia area. AOL, which made a lot of people rich, was based near Dulles Airport. The presence of the National Institutes of Health and the National Cancer Institute has spawned a large number of biotech companies here. J. Willard Marriott started his restaurants here, and Marriott Corp. is a major employer — all white collar folks. GEICO was founded here, and it’s a major employer, etc.

So, while it’s fun to do the Rush Limbaugh thing and analogize metro DC to the capital in “Hunger Games,” the truth is a little different.

As to this $32,000 “average car” that’s kind of nutso. As others have pointed out, there are perfectly good cars of all sizes and capacities that go out the door for less than that. I would say, for example, that Honda Accord Sport is hardly a penalty box. I will admit that I paid just about that in 2008 for my Honda Pilot EX-L, which was fully loaded except navigation. But since we tend to keep cars 10 years, I don’t feel bad about that . . . and it certainly was less than 10% of my gross income at the time.

While it’s true that emissions and safety had driven up the cost of cars, I don’t complain about that. But there are other things the every car now has were considered luxury items in the 1960s: power roll-up windows, leather seating surfaces, air conditioning, cruise control, in-car entertainment systems, etc. Somewhere in the mix between safety and luxury are automatic transmissions, power-assisted steering, and power brakes.

But I think that discussion is pointless. What is not pointless is that there are plenty of new cars out there, in all sizes, that can be driven off the lot for less than $30,000; and most of them aren’t penalty boxes by any means.

This report is based on a flawed premise, that median-income households buy median-priced new cars.

New car buyers are a distinct demographic that earns about twice the median income, iirc. I recall reading $90,000 in the last year, but can’t find a non-paywall site referencing this figure in my brain.

Here are sort of relevant, old data regarding individual model’s price to new-buyer income ratios: http://www.csparks.com/bmw/CarPriceVsIncome.xhtml

Along this latter note, I also recall reading that median Toyota Land Cruiser buyer at one time (circa 2000?) was around $180k, at which time median Lexus LX buyer income was over $300k. I can’t find the exact article referencing these figures from that time point, but this 2008 article references Land Cruiser buyer median income of $237k versus Sequoia buyer median income of $106k: http://www.chron.com/cars/article/Sequoia-vs-Land-Cruiser-1769769.php

The point of all of this is that specific vehicles have specific buyers. New vehicle buyers as a whole are not equivalent to median households in any state. Particular new vehicles have hugely different demographics, to further confound matters. Therefore, click-bait articles that simply compare median new car price to median income in each state are basically worthless.

Actually, it would still be interesting info if it compared median to median instead of median to average. It is likely the income level is skewed just because cars are so darned expensive that people can’t afford them…especially the current generation who are having a hard time finding living wage jobs.

I have said for years as wages remain stagnant and the cost of new vehicles skyrocket that the average slob is getting further and further priced out of the market.

In December 2001 when I bought my Chevrolet Avalanche, the sticker price of an every option checked off the list Z-71 was about $39K (with some dealer installed factory options you could probably push to $40K). That was closely aligned with an equivalent top trip Suburban at the time (and Z-71 designation is 4WD). The ‘burb was a bit more, but not dramatically.

A hair more than a decade later, an LTZ Suburban can push $65K easily – a 60% price increase in just 13 model years. Fundamentally “what is it” hasn’t changed. The safety content, quality of interior, and options has change dramatically – but were moving north of a 50% increase, way out stripping inflation.

Something has to give. And if the price of goods continues to go up, the gap between the haves and have nots will continue to widen.

Regardless of the dubious math in this story – I’ll close with this. If the guy putting together a Toyota Camry (with lowest in class ATP and about $10K base price lower than the “average” in this story) can’t afford the Camry – we’re all in trouble.

The people putting together Camrys do not live in Washington, D.C., or other expensive metropolitan areas. They live in rural areas in the South, which is where Toyota has located most of its North American factories.

Given the low cost of living in those areas (particularly housing costs), and the wages being paid by Toyota, I’m pretty sure that Toyota workers making Camrys can afford to buy a brand-new one, if they choose to do so.

As for your Chevrolet Suburban example – that is GM marking up the price to what the market will bear. There is no way that average wages could ever keep up with an increase of that magnitude. If demand for Suburbans (and Escalades and Denalis) really cools, I’m sure that the price would also come down dramatically. GM can get away with this level of price increase because, in many areas, its big SUVs have become the Electra 225s, Ninety-Eights and New Yorkers of the 21st century.

Your example is flawed because the *meaning* of a large SUV has changed dramatically. In 2001, it was just What You Bought if you had a family. Today it’s considered a luxury indulgence (well, unless you’re in Texas) and the family vehicle of choice is a slightly smaller three-row CUV, which if loaded has a price closer to $45k in 2001 dollars. And the dramatic increase in the Burban’s luxury correlates with that.

Overall, vehicle prices have not really outstripped inflation, despite an improvement in safety and standard equipment.

> San Francisco and Boston trailed the nation’s capital, ***while everyone else in the remaining cities** were paying too much for their new car

How does this make *any* sense? The city data is a statistical distribution of incomes, of which the “average” is just some distilled mean. It say nothing about arbitrary consumers. That’s akin to saying someone making 80k in DC is OK to buy the car but paying too much if he moves to Boston.

It’s as if Boston is on average smart enough to understand this basic math, but **everyone else in the remaining cities** are too dumb.

This whole thing seems quite useless…like they were looking to make a point and went ahead to make it. What does it even matter that the average person in a any particular city could “afford” a new car or not. Maybe people with abover average incomes buy new cars and they can all afford it by some arbitrary 10% of gross income measurement.

I could be single with no debt and pulling $100k easily affording my average new car, or I could be deep in debt and house poor with a large family and no way could I buy a new car…

Aol auto wasted how much money to avoid cracking a first year statistics book and reading the difference between median and average? Nope, it’s intentionally misleading. A damn lie blamed on statistics.

If the guys that build Camry cannot afford one, Toyota will be in trouble a lot sooner than society in general. And they will offer something affordable or go out of business.
Don’t get me wrong, I think the gap between the 1% and the rest are disturbing and we ought to find a solution for it.

I’m not sure the math they posted makes sense…20% of take home is 20% of after tax pay. That means someone making $230,000, who has a take home of ~$150K or so in many states should still not buy the average car priced at $32000 because 20% of 150K is only $30,000. Am I misunderstanding their math or are they saying everyone in DC makes more than 230K a year?!

Think monthly payment, not overall price. Someone making $230,000/year may take home $150K/year which equates out to a little over 10K/month. A $600 monthly payment is then only 6% of their take-home in any given month. On the other hand, someone taking home only $3,000/month or $36,000per year will see that $600 as right at that 20% figure. Anybody making less than $36,000 per year as such cannot afford a $30K car under the conditions stated, but they buy them either through lease or longer-term loans which pull the monthly payment down anywhere from $100-$300 and either have to turn the vehicle in (with a potential penalty) at the end of the 3-year lease or pay far more than someone buying the car under the stated conditions in interest.

Affordability is certainly a factor, but there are still plenty of reasonably priced vehicles that gets a person a new car without being overly expensive. However in my case, my vehicles are all getting older and I’m not out to replace them. The wife’s ride is now 10 years old. I use to replace our cars every five years.
My reasons for not buying:
1) It’s wonderful to be car payment free.
2) Long term job security is always a concern in this economy and I can’t foresee the future to the end of a car loan.
3) Modern cars if maintained will last a long time. Why let someone else get my well maintained cars?
4) I could care less what people think of what I drive. A few scratches, yesterday’s model. Big deal.
5) I hate car dealerships with a passion.

I’ll agree with you in general, AJ; pretty much for the 5 reasons you present. However…

As cars age, even when you attempt to maintain a car properly, breakdowns can become more frequent, resulting in higher costs. For me, when the monthly cost of maintaining a car approaches 50% of what a new car payment would be, I feel it’s time to replace the car and get a few years of trouble-free or warrantied service which may offer an upgraded level of comfort, safety and security.

I’ve had more than one car ‘die’ far sooner than it should because the previous owner didn’t take proper care, to the point that I refuse to purchased used if I can avoid it. Nearly every “second hand” car I’ve owned, even when it came from a family member, tended to cost me the equivalent of its purchase price in repairs within the first year–in two cases up to and including replacing the engine itself. My last three vehicles were all purchased brand new (well, I should say three of four) and well exceeded 130,000 miles on two of them before selling or trading while my newest one has over 50,000 miles on it and still offers reliable service–with caveats that were resolved out of warranty by the manufacturer.

My fourth vehicle mentioned is a 1990 pickup truck purchased with 144,000 miles on it–admittedly for a rock-bottom price of $2800. The body is in remarkable shape for its age and snow-belt environment but I needed new brake lines all around and a new exhaust manifold before I could even register it–doubling the purchase price. Add to this that the engine still needs work–at a minimum replacing the timing chain ($1K) and possible complete rebuild/replace ($4K) The BB value of the truck itself has already fallen off the charts, so the cost of repair doesn’t necessarily imply value for money spent in any kind of regular use. As such, the debate for me is strong as to whether I spend the money to effectively “restore” the truck at a potential $10K total cost or use the repair money as a down payment on a newer, more comfortable and more economical model pricing in around $30K and guaranteed to last at least six years or 100,000 miles? Personal experience says the new truck is the more secure choice, but it’s hard to argue with saving 60% of the cost–assuming nothing else goes wrong. I don’t trust that assumption.

I think you fail to understand the concentration of wealth in a city like DC, similar to NYC, that is what drives the nice cars. Of course you can’t know the situation of everyone driving a nice car but there are plenty of folks who can well afford them whether they are projecting an image or not. I live right next to one of the most expensive towns outside Boston, I’ve noticed I tend to home in on all the expensive metal and assume everyone is driving them. Many of the people with more than modest houses around here are worth many millions. A fancy car is nothing if the want it. DC and NYC are absolutely stacked with people like this.

Power6, one of my brothers lives in the Manhattan financial district in a high-rise multi-million dollar place given to his wife by her parents who moved to Santa Fe, NM and bought a ranch there.

I know what you mean about a lot of expensive iron being driven around the financial districts and upscale neighborhoods.

But I still maintain that it is driven by ego, just like housing is.

Why else would multi-millionaires like my brother’s in-laws GIVE/transfer their multi-million dollar place to their daughter and move to the desolate spaces outside of Santa Fe, NM?

How about my grandson’s in-laws giving their estate in Fallbrook, CA, to their daughter as a wedding present while they, the old folks, buy a huge place on the beach near Ensenada, Baja California, Mexico?

It is true that people with money can buy any car they like, but there are plenty of people with money who don’t buy the most expensive cars on the planet.

A lot is deemed by their self-esteem as to whether or not they have to present this picture of affluence to the world around them.

My brother in Manhattan still drives his F150 and his wife drives her Camry in spite of having newly-found wealth after the sale of the car dealerships.

He did buy a Leaf in 2012 but that didn’t work out very well in Manhattan for him and he sold the Leaf to a friend who owns a Golf course near Huntsville, AL. Plenty of electric Golf carts to keep the Leaf company there.

Am I the only person with a statistics background that is bothered by the words “average” when talking about new car prices, and “median” when talking about incomes? They are apples to oranges. The median income is based on lining all the items up by whatever you are measuring them by and picking the one in the middle. The average is when you add all the items up and divide by the total quantity. They can be very different. Generally, medians of products and incomes are considerably lower than averages because there are a fewer high priced items that skew the average.

Based on this, one would expect the average car to be too expensive for the median income. One would also expect the average income to easily be able to afford the median car.

I’d like to know what the median car price was. That is the price of all cars sold, lined up by price and pick the middle one.

Good point for transportation affordability in general, but it would still be interesting to know how many people can or feel they can afford a new car since that is what drives the industry. In the end, manufacturer profits are what really tell you whether people are buying.

On further thought, what would be interesting is the “mode” price of a new car. What is the most common price people pay. Round it off to the nearest $1000. I bet you’d see a price like $18,000 vs. the $32,000 average new car price reported. Also, I wonder how that compares to used prices. Also, is someone who pays $18,000 for a new car likely to pay a lot less for a used car or buy more car for the same price?

> On further thought, what would be interesting is the “mode” price of a new car. What is the most common price people pay. Round it off to the nearest $1000. I bet you’d see a price like $18,000 vs. the $32,000 average new car price reported.

For someone familiar with stats this is a very safe bet since the distribution curve of prices is not symmetric but rather has a longer tail on the high side. This necessarily implies the average is higher than the mode.

I think what y’all are looking for here is a “bell curve” of prices typically paid for vehicles, based on numbers of vehicles purchased of any type at each price (limiting to those vehicles known as “cars” and “pickup trucks” and not purpose-built recreational vehicles such as quad-bikes and campers.). I personally think the estimate of $18,000 is low since there are relatively few vehicles even available in that price range, while I do agree that it will be lower than the “average” of $32,000 where you have to consider that some personal vehicles price at $60K and higher. I think the actual price–the top of the bell curve as you will–will sit at the $25k-$26K range because that’s the general price of the most popular models of cars, while trucks will likely ride at the $35K-$35K range. Trucks do, you might note, make up roughly 25% of the annual automotive market here in the US–around three-quarters of a million units vs approximately 2.5 million total vehicles last year alone.

P.S. It is my experience that people greatly underestimate the real cost of owning and driving a car. They fail to add up depreciation + gas + maintenance + insurance + taxes + yearly registration and inspection fees + accident costs. There are probably other less hard costs like time lost driving that could be used for working or leisure.

Most Americans prefer to drive instead of walking, riding a bike or taking a bus.

The added cost of buying, owning and operating a vehicle is all just part of the cost of living.

Personally, I can’t see myself owning less than three reliable vehicles, even after my 16-yo grand daughter leaves our nest. Currently, she is driving our third vehicle as her daily driver, to and from school, work, shopping and other errands.

The people buying the 30-40k car make more than average in this area verses the rest of the country. The cost of living is so high that if you make 130k a year salary your spending most of it on your housing. So your car purchase comfort zone is at that 30-40k range. Other places in this county you would be stepping up to to the 40-50k range of car. So selling at the 30-40k range isn’t hard as it hits the income/cost of living sweet spot.

Being an engineer for a general contractor here I agree, the economy didn’t get hit as hard, hence why I live here. But it is the government contractors(mostly to the military) and lobbyists that make the big money. Not the government employees. My 2300sqft house that still has the original 1953 windows and kitchen cabinets cost me $650k and was a screaming good deal in my neighborhood. So the average GS 12/13 while making a good salary is not enough to own a home with out income from a spouse. Then facted with buying a car the choice price point is 30-40 for a purchase, otherwise you lease. On my street all the nice cars, 5 series, 3 series, Tahoe’s are leases. The camrys and accords are purchased.